According to a recent survey of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to raise money from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
This research of councils in the key cities group, which covers several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to cover the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of county councils recently further found council budgets being strained by the growing number of young people and older individuals needing special educational assistance.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
